GBPUSD: More bullish above 1.2800
Last Thursday’s signals were not triggered, as there was no bearish price action at 1.2859.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered prior to 5pm London time today.
Long Trade Ideas
⦁ Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2767 or 1.2697.
⦁ Place the stop loss 1 pip below the local swing low.
⦁ Adjust the stop loss to break even once the trade is 25 pips in profit.
⦁ Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.
Short Trade Ideas
⦁ Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2800 or 1.2871.
⦁ Place the stop loss 1 pip above the local swing high.
⦁ Adjust the stop loss to break even once the trade is 25 pips in profit.
⦁ Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
GBP/USD Analysis
I wrote last Thursday that I was looking to fade a spike following the Bank of England releases to any key level highlighted. This failed to produce anything, as the price was already moving down before those releases just added some strength to the move.
Last week saw the U.S. Dollar strengthen almost everywhere, and this pair was no exception. The Pound has lost its relative strength as although the governing Conservative Party lead in the opinion polls, the way votes are split, and Britain’s constituency system is suggesting this might translate into another deadlocked Parliament. Betting markets in the U.K. are implying only a 45% change of a Conservative majority. The Conservatives should remain in power and will probably have a few more seats than they have now even if they fail to get a majority, so they should be able to just about squeak Brexit through by the end of January.
Technically, it seems clear that today’s pivotal point following the recent bullish retracement is at 1.2800. If the price can get established above that level, it could rise over the earlier part of the London session, particularly if the British GDP data is better then expected, so I would be prepared to perhaps take a long trade on a short time frame for a conservative profit if that scenario plays out.
Concerning the GBP, there will be a release of Preliminary GDP data at 9:30am London time. It is a public holiday today in the U.S.A.